Fifty years after its founding, the International Energy Agency (IEA) is now a focus of debate in the United States over whether it should be trying to change the world’s energy mix. Originally founded to enhance the energy security of oil-importing countries, the agency added the global transition to low-carbon energy to its mandate a decade ago. It now faces intense pushback from critics of this expanded mission, who have powerful allies in the U.S. federal government.
What is the IEA?
The IEA was founded [PDF] in 1974 by the United States and other major oil-consuming countries in response to an embargo on oil sales imposed by Arab country producers, such as Saudi Arabia. The embargo, prompted by U.S. support for Israel during the 1973 Yom Kippur War, revealed unexpected vulnerability. The price of oil quadrupled, contributing to the most severe economic downturn [PDF] since the Great Depression.
U.S. Secretary of State Henry Kissinger mobilized the largest oil-consuming countries to address this shared weakness by creating a multilateral organization based in Paris. By pooling data and coordinating action through the IEA, they sought to diversify and expand energy supplies to avoid future crises as well as to manage crises that couldn’t be avoided.
Is the IEA’s energy security mission still relevant?
Yes, even though the world energy system has changed dramatically since the IEA’s founding. The United States, for instance, is now the world’s largest oil and gas producer. Russia, too, has emerged as a major supplier, and China and India are now among the largest oil importers.
Nonetheless, although the United States is more energy-secure than it used to be, it still imports millions of barrels of oil every day. Other members of the IEA remain quite vulnerable to international forces. Germany and the rest of Europe were bluntly reminded of this fact by Russia’s invasion of Ukraine in 2022. Fuel prices spiked, with a pronounced economic impact in Europe. Acting on its original mission, the IEA helped coordinate a collective response.
On a day-to-day basis, [the IEA’s] reports, models, and data are widely -consumed by private as well as public actors, lubricating market activity.
Does the IEA do anything about climate change?
Since 2015, the IEA has carved out a role supporting the global clean energy transition, which would slow and ultimately halt climate change. If the transition is successful, most energy would come from resources such as nuclear power and renewables, which are intrinsically free from the carbon dioxide emissions that drive climate change. Fossil fuels, which today account for more than 80 percent of the world’s energy, would only be used when their emissions can be captured.
Climate change has moved from obscurity in 1974 to become a central theme of international politics in this century. Energy policy is implicated in combating global climate change because unabated fossil fuel consumption—which leads to the global atmosphere to function more like a greenhouse, blocking some of the energy that would otherwise radiate into outer space—is the primary cause of global warming and extreme weather effects.
The 2015 Paris climate agreement prompted the IEA’s governing board to expand the agency’s mandate to embrace “energy security beyond oil,” engage with major emerging economies, and focus on clean energy technologies. In 2022, the mandate was broadened further to include sourcing and production critical minerals and metals needed to develop clean energy technologies.
How big is the IEA and who funds it?
The IEA has thirty-two members today, up from seventeen at its founding. All except Mexico and Turkey are high-income countries. The agency’s expanded mandate enabled thirteen developing countries, including China, to associate with the IEA, enabling them to participate in its meetings and collaborate to a limited degree. However, only member countries, represented by their energy ministries, have votes on IEA’s Governing Board.
Member countries provide the bulk of the agency’s $30–35 million annual budget. In addition to their dues, countries can make voluntary contributions, as can nongovernmental charities. According to the U.S. Senate Energy Committee [PDF], the United States has provided an average of 14 percent of the IEA’s overall budget since 2021. In 2024, that totaled around $6 million.
Has the IEA been successful?
That is a matter of intense debate. The global energy system is so large that no entity of the IEA’s modest size can move it alone. When acting as a crisis manager or seeking to advance the energy transition, the IEA can at best support what its members and associate countries are doing on their own. On a day-to-day basis, however, its reports, models, and data are widely consumed by private as well as public actors, lubricating market activity.
The IEA’s reputation as the “gold standard” for energy-related information, though, has come under attack in recent years. One set of critics, including many in Europe as well as in U.S. nongovernmental organizations, complains that the IEA is moving too timidly to support the energy transition. In particular, they assert that the agency underestimated the potential of renewable energy, especially solar power. The IEA mollified these critics to some degree by developing a new Net Zero Emissions by 2050 model. It also replaced “current policies” in its baseline model with “stated policies,” which countries have announced but not necessarily implemented. The latter approach produces projections that are more favorable to the energy transition and less bullish about fossil fuel.
These moves, in the context of the IEA’s expanded mandate, infuriated other critics, who believe the agency’s new modeling framework systematically understates future demand for oil and gas, threatening energy security and undermining oil and gas investments. A December 2024 report by the U.S. Senate Energy Committee, led by Senator John Barrasso (R-WY) (now the second-ranking Senator for the Republican party) makes the fullest case. The report calls the energy transition “unachievable” and accuses the IEA of promoting “the false sense that [the transition] will be neither difficult nor expensive.”
How will the Donald Trump administration affect the IEA?
The Trump administration is cutting back U.S. commitments to a wide range of international organizations. Given the criticism from Senator Barrasso and his allies, funding for the IEA is likely to be on the chopping block. (Although the administration has not yet made any public statement to that effect.) If the administration doesn’t withdraw from IEA membership, it will certainly seek to redirect the agency’s agenda.
There is important common ground between the IEA and the Trump administration that may soften the blow. The administration would like energy markets to be robust, and the markets rely on IEA data. The administration also shares the IEA’s interest in critical minerals and cybersecurity.
The IEA’s response to Barrasso’s report could influence the administration’s next move. While the agency shouldn’t abandon its expanded mandate, it can respond constructively not only by retooling its messages but also by adopting some of its critics’ ideas, such as reinstating its old baseline model.